The Czech bonds tried to catch gains of German Bunds in previous sessions, while they were not able to react to a negative development in core markets after releasing the US data during late afternoon. The market, however, has remained confident that CNB will raise its official rate by 25 bps on Thursday.
While the d omestic bonds may initially retreat to follow again core markets, we expect little action (ahead) central bank’s meeting. Bears should nervously await Thursday meeting, since a rate hike is not certain.
(CSOB - Investment research)